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Home / Washington Business - September/October 2007 / Chair's Corner: AWB ready for challenging times ahead |
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Chair's Corner: AWB ready for challenging times ahead |
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Written On: September/October 2007 |
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Kirk Nelson is state president for Qwest Communications International. Nelson is the company’s business and policy leader in Washington, responsible for all state operations, including legislative and regulatory advocacy.
Good times don’t last forever, although these days it may seem so. Washington is in the midst of unprecedented growth. Each quarter our state’s economy produces record tax revenues. It’s an enviable position to be in.
Think back to 2003, when we were at the bottom of the recession and our state legislators and then-Gov. Gary Locke faced a $2.7-billion deficit heading into the two-year budget cycle. The Legislature initiated the Priorities and Price of Government process to target where our limited tax dollars would go. It worked.
This year, the Legislature was blessed with surplus revenues and came to Olympia with $2 billion in the bank and tax collections far exceeding expectations. Some wondered if a rainy day would ever come. In the end, Gov. Gregoire signed a two-year budget which increases state spending by 15 percent. With revenue growth projected at 7 to 8 percent, we could be facing big trouble in the years ahead.
There are signs our economy is cooling. While unemployment is down and business activity is fairly strong, interest rates are inching up, home sales are lagging, and home foreclosures are rapidly rising. That is disturbing news since one of the key sectors fueling our economic recovery is the real estate excise taxes collected on the sale of new and previously owned homes.
Another worrisome factor is the cost of construction materials. With China’s economy growing at a 10-percent clip, Chinese business leaders are buying all of the concrete, steel, and aluminum they can get their hands on. That not only drives up prices, but demand has outpaced manufacturing capacity, causing shortages.
Finally, the cost of energy and skilled workers continues to climb because there’s a growing scarcity of both.
Preparing for economic downturns is something the Association of Washington Business does well. In partnership with the Washington Roundtable, the Washington Research Council, local chambers of commerce and trade associations, AWB’s focus is on competitiveness in good times and in bad.
Almost a decade ago, AWB forged a partnership with the Washington Roundtable and the Washington Research Council called the Washington Alliance for a Competitive Economy (WashACE). It has been an effective collaboration that has sharpened the focus on the business climate.
Through WashACE, AWB works to improve the state’s business climate. We want to make sure the cost of doing business in Washington is as low as possible; our state’s laws, rules and regulations are simple, understandable, and are appropriately targeted; that private-sector employers continue to come to Washington, to stay and expand.
Simply put, we want to grow our state’s private sector so record tax dollars keep rolling in. In turn, those tax revenues need to be targeted where they can do the most good in education, public safety, the environment, and for our general quality of life.
Washington is a unique state and AWB is a unique organization. In recent years, our association has received numerous national honors including the U.S. Chamber of Commerce’s “Accreditation with Distinction.” AWB is one of only two state chambers in the nation to earn that honor.
So, while we celebrate the fact that Forbes magazine recognizes the progress our state is making toward competitiveness, we also salute the fine work of AWB, WashACE and our partners.
Progress, change and improvement take hard work. Unfortunately, in the competitive world in which we live success can be transitory. Staying competitive is an ongoing effort. Today’s global economy is like the Indianapolis 500: The field is very competitive. Taking one second longer in the pits changing tires or refueling can cost you the race.
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